Saudi Arabia imports 80% of its food requirement - Foodex Saudi

Published 2018-07-05 04:23:46

KSA’s food industry remains one of the most attractive in
the region, with strong sales growth expectation over our forecast period. On
an average, KSA imports 80% of its food requirement where food accounts for 15%
of its total imports. Based on the governments’ initiatives (NPL) to overcome
obstacles on foreign investment, Saudi Arabia’s food processing sector is
expected to attract strong investment, particularly in the key segments, which
are contributing to the growth in local food consumption.

The expansion of the big organized food retailing and
producer such as AlMarai and Savola will continue to strengthen internal trade
systems and local food production, which is expected to contribute to lower
cost, that can be passed on to consumers partially offsetting impact of value
added tax (VAT). Although we believe the labour market is under pressure, the
food sector will benefit from a sizeable population of around 31.74mn, with an
average household of 6.4 persons.

This will boost the demand for consumer goods amid a weak
consumer spending environment. Saudi Arabia’s population is expected to reach
33.0mn by 2021, making it the only market in the Gulf region that can
realistically provide investors with long-term volume growth potential.